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Public Statements

Economic Development Revitalization Act of 2011

By:
Date:
Location: Washington, DC

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Mr. COBURN. Mr. President, I have spoken on this earlier in the week. I will not spend a great deal of time today. Thanks to the majority leader, we will have two votes this afternoon on items that I think are representative of critical problems in our country.

The first is a vote on an amendment by Senator Feinstein and myself that eliminates payment to the largest refining and oil companies in this country to blend ethanol, which they have honestly admitted--and they sent us a letter saying it--they don't want.

The second is on whether we will subsidize, with Federal tax dollars, additional pumps to use ethanol.

The reason the votes are important is because the way we get out of trouble as a nation is a couple of billion dollars at a time. We have a Federal mandate that says X amount of fuel has to be blended with ethanol every year. That will rise to 22 billion gallons in 2015. So there is no reason for us to pay somebody to blend it when they already have to, and we have seen the shift in the industry from small entities to the very large. When this program started, it was about less than a billion dollars in cost. It will now be, on an annualized basis, around $6 billion. While we are running a $1.6 trillion deficit, we need every penny we can get. So I am thankful this has been brought up. But it begs the larger question--actually there are two. One, can we trust markets--real markets--to work more effectively than Washington mandating and dictating policies?

Throughout our history--if you look at it in total--no government can ever do any allocation of scarce resources as well as the market can. The markets are not perfect. There is no question, they make mistakes and cause occasional shortages. But overall, in the long run, markets work much better than a bureaucratic Soviet-style mandate of what we will do and what price we will pay for it.

The second question it begs is, what is our country's energy policy? We send a quarter of a trillion dollars a year outside this country for oil and gas, liquids and natural gas. That is a quarter of a trillion dollars that we could invest here and pay for our own resources.

We are the only nation in the world where our resources are owned by the citizens and our own government limits our ability to utilize it.

The CRS just finished a study that shows that the oil and gas reserves in the United States are greater than that of Saudi Arabia, China, and Canada combined. So the question is, why aren't we using ours, rather than sending money overseas and undermining our own economy and not creating jobs?

The projections are that if we would truly utilize our resources, we could create close to 190,000 jobs a year in the exploration and energy business--without subsidies, without tax credits; that is what would be the result. With oil near $100 a barrel, and we continue to send the money out of the country instead of going after our own resources, which are plentiful, we have to ask the question, what are we doing?

The final point I will make is, when you buy ethanol-blended gasoline and you look at the price and you see, here is regular that has no ethanol in it, and here is ethanol-blended gasoline that is about 20 or 25 cents cheaper, it is important that the American people understand that you need to add $1.72 to that to get the real price you are paying for that blended gasoline, because that is what your government has put into the pipeline in the way of loans, grants, subsidies, blenders credits, and taxes on imported ethanol. So even though it looks cheaper, it is not. It is about $1.40 more, when you look at all the costs taken from you as a taxpayer and put into the pipeline and given to the special interests, in terms of what we will have, and where we will have it, and when we will have it.

I support ethanol alternative fuel, especially now that it has 7 1/2 percent of our market. But the best way for ethanol to survive is for it to stand on its own two feet, without subsidies, without us spending dollars we don't have to get something that we are going to get anyway.

I am extremely pleased with my discussions with Senator Reid. I am thankful to Senator Cardin, as well as Senator Feinstein. She has been working on this for a long time. She opposed this when it started. She recognizes that what we have actually done is not help ourselves that much. We have markedly increased the cost of food. We can say 40 percent of the corn crop this last year went for ethanol, and corn is at historic highs. When you look at a poultry producer or beef producer or pork producer or lamb producer or turkey producer or milk producer or egg producer, their largest cost has doubled because of this policy.

Quite frankly, America is lucky because the worldwide demand for grains--given our wonderful farm community and their ability to produce--is extremely high and our farmers are extremely efficient. So this policy will not affect farm prices significantly right now. But, hopefully, in the future it will bring them down to a more moderate level.

Two-and-a-half years ago, corn was at $3 a bushel and most corn farmers made money. It is now above $7, even though their input costs have risen somewhat with the increase of oil prices. The farms in our country that raise grains have never been in better shape--if they can get a crop in. I know we have areas in the country where that hasn't happened.

So I think overall we are starting to address some of the misdirected capital formation in this country by backing off on government picking of winners and losers, and I am thankful for the opportunity to speak on that.

I yield the floor, as I see the Senator from Iowa is here.

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